June 2005

1
ICT servicesWho will consume what in France in
2010?

• June 2005

2
Table of contents

• Moderate growth of consumer ICT services
• Mobile services the chief growth vector
• Fixed voice a declining market
• New ways to access TV
• Internet a mass market, but still a divide
• The spread of broadband as a path to new internet
  services
• New services combined with access the advent of
  the quadruple play?
• Growth of households budgets / Sectors to be
  focused on.
• Consumer segmentation / Customers to be focused
  on.
• Innovation Norway Paris Office

3
Moderate growth of consumer ICT services

• The consumer ICT market offers moderate growth
  prospects and, should grow by an average 1.6 up
  to 2010.
• French households currently spend 110 EUR a month
  on ICT services (fixed and mobile phone, internet
  access, pay-TV, video, music, video games) and,
  will be spending 121 EUR a month in 2010.
• Consumers telecom budget (transport and voice)
  still accounts for a larger portion of spending
  than content, which accounted for only 30 of
  budgets in 2004. Nevertheless, contents share of
  household spending will increase, in large part
  due to the rise of mobile data services (MMS,
  mobile video, music, games and TV).

4
Mobile services the chief growth vector

• Mobile services are the main driving force behind
  growth, and will account for close to half of ICT
  service budgets in 2010.
• French households still have relatively low rates
  of mobile equipment compared to other European
  countries (66 penetration rate in France), but
  growth margins on this market are high.
• In addition, the launch of mobile data services,
  such as internet access, music, video and TV will
  all contribute to increasing average spending.

5
Fixed voice a declining market

• First, because of mobile substitution 15 of
  households now have no fixed phone line at all
  making all their calls on their mobile. By 2010,
  this percentage will have risen to 29.
• Second, the rise in the price of subscriptions
  will not be enough to compensate for the drop in
  calling rates.
• And, lastly, Voice over IP offers, whether
  coupled or not with internet access, will become
  increasingly popular thanks to flat rate
  offerings. They will compete directly with voice
  services on the wireline network, and will cut
  into fixed voice revenues.

6
New ways to access TV.

• DTT and ADSL recently launched expand the free
  offering 7 new free to air channels for DTT at
  launch, and 8 more at term, plus some one hundred
  free channels being offered by Free, for
  instance.
• This expansion of the free to air offer is likely
  to be detrimental to the pay-TV market when
  faced with a broad selection of free channels,
  viewers will have trouble perceiving any real
  added value in pay-TV channels. 30 of pay-TV
  subscribers stated that they would cancel their
  subscription if an offer of around 20 free
  specialty channels were available.

7
Internet a mass market, but still a divide

• The internet market is becoming a mass market
  more than a quarter of French households are
  equipped with a connection to the web (some 7
  million households), and close to one French
  person in two (27 million inhabitants) uses the
  internet, whether at home, at a friends house,
  at work or at school.
• Nevertheless, major usage disparities still
  exist, chiefly in terms of age and socioeconomic
  situation 90 of the 15-24 age group uses the
  internet, compared to only 15 of the over 65
  set.
• Senior citizens have little interest in the net
  the chief obstacle being a lack of practice and,
  more generally, a lack of interest. Nevertheless,
  it has been observed a slight increase in this
  age group, since internet use amongst people over
  65 in France has risen from 8 to 15.

8
The spread of broadband as a path to new internet
services

• 2004 was marked by the stunning rise in broadband
  use, and there are now more households connected
  to the web via broadband than with a dial-up
  connection.
• The speeds themselves have increased
  substantially basic offers now run at 8 Mbps,
  and ISP Free offers up to 20 Mbps.
• By 2010, all connected households will be
  broadband, surfing at very high speeds.
• This rise in available bitrates opens the door to
  an array of new services on the web, and
  particularly for audiovisual content that
  requires high bitrates to operate.

9
New services combined with access the advent of
the quadruple play?

• Services marketed alongside access provide a
  major opportunity for ISPs to maintain their ARPU
  and to cement customer loyalty.
• Voice over IP is now the most appealing service
  in terms of demand, since 12 of netizens
  already use it, and close to half state that they
  are interested in it.
• Television too represents a possible growth
  vector for internet access providers.
• Access providers are moving more and more towards
  bundling strategies combing access to the web
  with wireline voice and TV services. Strategies
  aim at distinguishing themselves from the
  competition, at gaining subscriber loyalty and in
  minimizing the drop in average per subscriber
  revenues.
• Telcos too are now studying the possibility of
  integrating mobile services in their bundles,
  thereby creating the quadruple play.

10
Growth of households budgets / Sectors to be
focused on.

• A

11
Consumer segmentation / Customers to be focused on
12
The Paris OfficeProjects portfolio since 2000
ICT represents about 1/3 of the total
13
The Paris office

• Working experience
• Product Manager in Telecom Industry (Alcatel)
• Technology Adviser in Telecom Industry
• Education
• Engineering school in ICT, Bordeaux, France
• Master in Marketing in Strategy in IAE, Bordeaux.

14
The Paris Office

• A full range of services
• Strategies for market entry, Market Size and
  Trend Analysis, Competitor Analysis
• Agent, Distributor and Partner Searches, Pricing
  Strategies, Product Testing
• Advice on setting up a subsidiary
• Short term representation and/or hosting of
  Norwegian companies
• Promotional activities (ehxibitions) , Press
  work

15
The Paris Office
Connecting our knowledge about local
conditions/markets and the potential of the
companies, with international possibilities.
16
Takk for oppmerksomheten!

• This presentation has been issued by Innovation
  Norway, Paris office
• For more information, Oleg Kosine is at your
  disposal to answer any question.
• Oleg.kosine_at_invanor.no
• Fix 33 1 56 59 20 40
• Mob 33 6 27 26 41 16